Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (First Chamber)

20 June 2018 (*)

(Arbitration clause - Grant agreements concluded in the context of the Lifelong Learning Programme (2007-2013) - NEST and ‘This is IT’ projects - Ineligible costs - Reclassification of the action)

In Joined Cases T‑306/15 and T‑484/15,

KV, represented by S. Pappas, lawyer,

applicant,

v

Education, Audiovisual and Culture Executive Agency (EACEA), represented initially by H. Monet and D. Homann, and subsequently by H. Monet, acting as Agents,

defendant,

ACTIONS pursuant to Article 272 TFEU and seeking a declaration that, by declaring ineligible some of the staff costs incurred by the applicant in connection with the Network for Staff and Teachers in Childcare Services (‘NEST’) and Facilitating and fostering digital competence through volunteers - This is IT (‘This is IT’) projects, the EACEA did not correctly interpret and apply the contractual provisions relating to those projects,

THE GENERAL COURT (First Chamber),

composed of I. Pelikánová, President, V. Valančius (Rapporteur) and U. Öberg, Judges,

Registrar: E. Coulon,

gives the following

Judgment

 Background to the dispute

1        The applicant, KV was, before 31 July 2013, a limited partnership governed by Greek law, specialising in providing training, education, advice and expertise.

2        In 2010 and 2011, the applicant took part in several European projects in the context of the Lifelong Learning Programme established by Decision No 1720/2006/EC of the European Parliament and of the Council of 15 November 2006 establishing an action programme in the field of lifelong learning (OJ 2006 L 327, p. 45) and implemented by the Education, Audiovisual and Culture Executive Agency (EACEA). The applicant concluded grant agreements with the EACEA with a view to its participation in two projects.

3        In the course of the implementation of those European projects, the EACEA acted under the control of the European Commission and had to comply with Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ 2003 L 11, p. 1).

4        First, the applicant participated in the Network for Staff and Teachers in Childcare Services (‘NEST’) project, the aim of which was to establish a network concerned with the development of staff responsible for the education and care of young children. The grant agreement was signed on 9 November 2011 by the applicant and by the EACEA for a maximum EU funding of EUR 392 862.

5        Secondly, the applicant participated in the Facilitating and fostering digital competence through volunteers - This is IT (‘This is IT’) project. The grant agreement was signed on 2 December 2011 by the applicant and by the EACEA for a maximum EU funding of EUR 434 144.

6        The grant agreements relating to the NEST and ‘This is IT’ projects are governed by general terms and conditions comprising two parts, of which Part B deals with ‘Financial provisions’. Article II.14.1 of Part B, entitled ‘Eligible costs’, provides:

‘Eligible costs of the action are costs actually incurred by a beneficiary, which meet the following criteria:

–        they are incurred during the duration of the action as specified in Article 1.2.2 of the agreement, with the exception of costs relating to final reports and external audit reports on the action’s financial statements and underlying accounts;

–        they are connected with the subject of the agreement and they are indicated in the overall budget of the action;

–        they are necessary for the implementation of the action which is the subject of the grant;

–        they are identifiable and verifiable, in particular being recorded in the accounting records of a beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost-accounting practices of the beneficiary;

–        they comply with the requirements of applicable tax and social legislation;

–        they are reasonable, justified, and comply with the requirements of sound financial management, in particular regarding economy and efficiency.

–        The beneficiaries’ accounting and internal auditing procedures must permit direct reconciliation of the costs and revenue declared in respect of the action with the corresponding accounting statements and supporting documents.’

7        Article II.14.2 of the grant agreement defines ‘Eligible costs’ as follows:

‘The eligible direct costs for the action are those costs which, with due regard for the conditions of eligibility set out in Article II.14.1, are identifiable as specific costs directly linked to performance of the action and which can therefore be booked to it direct. In particular, the following direct costs are eligible provided that they satisfy the criteria set out in the previous paragraph:

–        the cost of staff assigned to the action, comprising actual salaries plus social security charges and other statutory costs included in the remuneration, provided that this does not exceed the average rates corresponding to the beneficiary’s usual policy on remuneration.

...’

8        Article II.14.4 of the grant agreements lists those costs which are not considered to be eligible, which include the ‘return on capital’.

9        In addition, the Lifelong Learning Programme’s Project Handbook (‘the Lifelong Learning Project Handbook’) further describes the eligible costs in point 2.3.1 thereof, which provides:

‘Costs relating to the following categories of staff are considered:

–        statutory staff, having either a permanent or a temporary employment contract with the partner;

–        temporary staff, recruited through a specialised external Agency.’

10      With respect to the grant agreement for project NEST, the applicant sent the EACEA, on 8 January 2015, a request for payment and the final report for the project.

11      On 19 January 2015, the EACEA sent the applicant a request for additional information relating to certain staff costs.

12      On 17 February 2015, the EACEA received the documentary evidence requested.

13      By decision of 10 April 2015 (‘the contested decision in Case T‑306/15’), the EACEA approved the final report relating to project NEST and notified the applicant of the final amount of the grant that it would be paid, after deduction of any sums already paid and the costs considered as ineligible.

14      With regard to the expenditure relating to staff costs considered ineligible, the EACEA took the view that the applicant had not demonstrated, with respect to the services provided by the partners therein, the existence of an employment relationship within the meaning of Article II.14.2 of the grant agreement and paragraph 2.3.1 of the Lifelong Learning Project Handbook. In addition, the EACEA took the view that the evidence submitted by the applicant did not allow it to conclude that an employment relationship between the individuals in question existed, as no element of subordination could be found.

15      With respect to the grant agreement relating to project ‘This is it’, the applicant sent the EACEA, on 6 March 2015, a request for payment and the final report for the project.

16      By decision of 23 June 2015 (‘the contested decision in Case T‑484/15’), the EACEA approved the final report relating to project ‘This is IT’ and notified the applicant of the final amount of the grant that it would be paid, after deduction of any sums already paid and the expenses considered as ineligible.

17      As regards the staff costs declared ineligible, the EACEA took the view that the applicant had not demonstrated, with respect to the services provided by the partners therein, the existence of an employment relationship and that it had not established the existence of an element of subordination between the partners and the applicant.

 Procedure and forms of order sought

18      By applications lodged at the Court Registry on 9 June and 20 August 2015 respectively, the applicant brought the present actions.

19      By decision of the President of the First Chamber of the Court of 18 May 2017, Cases T‑306/15 and T‑484/15 were joined for the purposes of the decision closing the proceedings in accordance with Article 68 of the Rules of Procedure of the General Court.

20      By document lodged at the Court Registry on 31 July 2015, the applicant submitted an application for anonymity in Case T‑306/15, which was granted on 2 September 2015.

21      By document lodged at the Court Registry on 20 September 2015, the applicant submitted an application for anonymity in Case T‑484/15, which was granted on 4 November 2015.

22      By decision of the President of the General Court, the present case was assigned to a new Judge-Rapporteur sitting in the Sixth Chamber.

23      Following a change in the composition of the Chambers of the General Court, pursuant to Article 27(5) of the Rules of Procedure, the Judge-Rapporteur was assigned to the First Chamber, to which the present case was accordingly allocated.

24      In Case T‑306/15, the applicant claims that the Court should:

–        principally, annul the contested decision in so far as it declares ineligible staff costs in an amount of EUR 10 881.29, corresponding to the remuneration paid for the ‘additional’ services provided by the two partners therein in the context of the implementation of project NEST;

–        subsidiarily, annul the contested decision in so far as it declares ineligible the staff costs corresponding to the remuneration paid for the ‘additional’ services provided by a partner in the context of the implementation of project NEST;

–        order the EACEA to pay the costs.

25      The EACEA contends that the Court should:

–        dismiss the action as inadmissible and, in any event, as unfounded;

–        order the applicant to pay the costs.

26      In Case T‑484/15, the applicant claims that the Court should:

–        annul the contested decision in so far as it declares ineligible staff costs in an amount of EUR 9 062.78, corresponding to the remuneration paid by the applicant for the ‘additional’ services provided by a partner in the context of the implementation of project ‘This is IT’;

–        order EACEA to pay the costs.

27      The EACEA contends that the Court should:

–        dismiss the action as inadmissible and, in any event, as unfounded;

–        order the applicant to pay the costs.

28      In response to a question put by the Court, the applicant stated that, in the event that the application for annulment brought in Case T‑484/15 be reclassified as an action based on Article 272 TFEU, its heads of claim should be understood as seeking, in essence, that the General Court declare as eligible the staff costs corresponding to the remuneration paid to some of its partners in the implementation of the European projects in question and that the EACEA incorrectly held to be ineligible.

29      The Court (First Chamber) decided, under Article 106(3) of the Rules of Procedure, to rule on the action without an oral part of the procedure.

 Law

 The jurisdiction of the Court and the admissibility of the action

30      Without formally raising a plea of inadmissibility under Article 130(1) of the Rules of Procedure, the EACEA submits that the applications made in the present cases on the basis of Article 263 TFEU are inadmissible on the ground, in essence, that the measures which are challenged by the applicant form part of a purely contractual framework from which they are inseparable. Consequently, they are not, by reason of their nature, acts whose legality may be challenged on the basis of Article 263 TFEU. Consequently, the actions brought in Cases T‑306/15 and T‑484/15, in so far as they seek the annulment of such acts on the basis of Article 263 TFEU, are inadmissible.

31      First of all, it must be pointed out that it is for the applicant to choose the legal basis of its action and not for the Courts of the European Union themselves to choose the most appropriate legal basis (judgment of 15 March 2005, Spain v Eurojust, C‑160/03, EU:C:2005:168, paragraph 35, and order of 12 October 2011, Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro v Commission, T‑353/10, EU:T:2011:589, paragraph 18).

32      In the present case, in Cases T‑306/15 and T‑484/15, the applicant brought its action for annulment on the basis of Article 263 TFEU. The contested decision in Case T‑306/15, which the applicant expressly requests the annulment of, is the decision of the EACEA of 10 April 2015 determining the final amount of the grant in the context of the grant agreement relating to project NEST. The contested decision in Case T‑484/15 is the decision of the EACEA of 23 June 2015 determining the final amount of the grant as part of the grant agreement for project ‘This is IT’.

33      However, the applicant states, in its observations on the plea of inadmissibility raised by the EACEA in Case T‑306/15, that, in the event that the Court holds that the action for annulment is inadmissible, that action could be reclassified as a contractual claim based on Article 272 TFEU, since all of the pleas in law relied on allege infringements of contractual terms which the Court has jurisdiction to hear pursuant to the arbitration clause set out in Article I.9 of the grant agreement for project NEST.

34      Furthermore, in reply to a written question from the Court in Case T‑484/15 inviting the applicant to indicate whether, in the event that the dispute in question would be reclassified as an action based on Article 272 TFEU, it would challenge such a reclassification, the applicant informed the Court that the pleas relied on in that case concerned the interpretation and application of contractual terms and that, consequently, it would not object to such a reclassification.

35      In those circumstances, it is necessary to assess, first, whether the actions brought in Cases T‑306/15 and T‑484/15 are admissible under Article 263 TFEU before going on to examine, if necessary, in the event that the actions for annulment are inadmissible, whether they could nonetheless be reclassified as actions brought under Article 272 TFEU.

 The admissibility of the actions brought in Cases T‑306/15 and T‑484/15 in the light of Article 263 TFEU

36      According to case-law, measures adopted by the institutions in a purely contractual context from which they are inseparable are, by their very nature, not among the measures whose annulment may be sought pursuant to Article 263 TFEU (see judgment of 17 June 2010, CEVA v Commission, T‑428/07 and T‑455/07, EU:T:2010:240, paragraph 52 and the case-law cited).

37      In Case T‑306/15, it is apparent from the documents in the file that the contested decision, entitled ‘Approval of the final report and of the final payment’, has to be seen in the context of the implementation of the grant agreement between the EACEA and the applicant as part of project NEST; its purpose is to determine the final amount of the grant to be awarded to the applicant and to notify it of the final payment of eligible costs in respect of that project.

38      First, it is not disputed that the EACEA has set the final amount of the grant at EUR 325 356.89 for the applicant. Secondly, it is not disputed that the EACEA has, on the basis of the provisions of Article II.14 of the grant agreement relating to project NEST, declared part of the staff costs in an amount of EUR 10 881.29 ineligible. Thirdly, it follows from Article II.18.1 of that agreement that the EACEA is entitled to require the applicant to reimburse any sums unduly paid or whose recovery is justified under that agreement.

39      In those circumstances, it must be held that the contested decision in Case T‑306/15 forms part of a purely contractual context from which it is inseparable, within the meaning of the case-law referred to in paragraph 36 above.

40      Similarly, in Case T‑484/15, it is apparent from the documents in the file that the contested decision, entitled ‘Approval of the final report and of the final payment’, has to be seen in the context of the grant agreement between the EACEA and the applicant as part of project ‘This is IT’; its purpose is to determine the final amount of the grant to be awarded to the applicant and to notify it of the final payment of eligible costs in respect of that project.

41      First, it is common ground that the EACEA has classified costs related to project ‘This is IT’ in an amount of EUR 64 018.04, including EUR 9 062.78 corresponding to a share of the staff costs, as non-eligible. Moreover, it follows from Article II.18.1 of the grant agreement relating to project ‘This is IT’ that the EACEA is entitled to require the applicant to reimburse any sums unduly paid or whose recovery is justified under that agreement.

42      In those circumstances, it must be held that the contested decision in Case T‑484/15 forms part of a purely contractual context from which it is inseparable, within the meaning of the case-law referred to in paragraph 36 above.

43      In the light of the foregoing, it is apparent that the actions brought in Cases T‑306/15 and T‑484/15, in so far as they have been brought on the basis of Article 263 TFEU and seek the annulment of the contested decisions, are inadmissible.

 The reclassification of the actions brought in Cases T‑306/15 and T‑484/15

44      Pursuant to Article 272 TFEU, it should be recalled that the General Court does not have jurisdiction to rule at first instance on disputes of a contractual nature brought before it by natural or legal persons unless this is pursuant to an arbitration clause. In the absence of such a clause, the Court would be extending its jurisdiction beyond the limits placed on it (orders of 3 October 1997, Mutual Aid Administration Services v Commission, T‑186/96, EU:T:1997:149, paragraph 47, and of 8 February 2010, Alisei v Commission, T‑481/08, EU:T:2010:32, paragraph 58).

45      The jurisdiction of the European Union judicature, under an arbitration clause, to hear a case concerning a contract is to be assessed, according to the case-law, solely in the light of the provisions of Article 272 TFEU and the terms of the clause itself (judgment of 8 April 1992, Commission v Feilhauer, C‑209/90, EU:C:1992:172, paragraph 13). That jurisdiction derogates from the ordinary rules of law and must therefore be given a restrictive interpretation (judgment of 18 December 1986, Commission v Zoubek, 426/85, EU:C:1986:501, paragraph 11). Thus, the General Court can adjudicate on a contractual dispute only if the parties have expressed their will to confer that jurisdiction on the Court (see judgment of 16 September 2013, GL 2006 Europe v Commission, T‑435/09, EU:T:2013:439, paragraph 38 and the case-law cited; see also, to that effect, order of 3 October 1997, Mutual Aid Administration Services v Commission, T‑186/96, EU:T:1997:149, paragraph 46).

46      Having regard to the arbitration clause set out at Article I.9 of the grant agreements in question, which provides for the EU Courts to have jurisdiction to settle any dispute concerning the application of the provisions of the agreement and the arrangements for implementing it, it must be examined whether the present actions may be reclassified as actions brought under Article 272 TFEU.

47      In that regard, it is important to recall that the Court, where an action for annulment has been brought before it, whereas the dispute was, in fact, contractual in nature, has already agreed to reclassify the action if the conditions for such a reclassification are met (see judgment of 17 June 2010, CEVA v Commission, T‑428/07 and T‑455/07, EU:T:2010:240, paragraph 57 and the case-law cited).

48      On the other hand, when faced with a dispute which is contractual in nature, the Court considers itself unable to reclassify an action for annulment either where the applicant’s express intention not to base his application on Article 272 TFEU precludes such a reclassification (see judgment of 17 June 2010, CEVA v Commission, T‑428/07 and T‑455/07, EU:T:2010:240, paragraph 59 and the case-law cited) or where the action is not based on any plea alleging infringement of the rules governing the contractual relationship in question, whether they be contractual clauses or provisions of the national law designated in the contract (see judgment of 17 June 2010, CEVA v Commission, T‑428/07 and T‑455/07, EU:T:2010:240, paragraph 59 and the case-law cited).

49      It follows that reclassification of the action is possible to the extent that the express intention of the applicant does not preclude it and that at least one plea alleging infringement of the rules governing the contractual relationship in question is put forward in the application pursuant to the provisions of Article 76 of the Rules of Procedure. Those two criteria are cumulative.

50      In that regard, it should be noted that the pleas raised by the applicant in support of the present action allege a manifest error of assessment committed by the EACEA in respect of, on the one hand, the lack of criteria making it possible to distinguish between ‘usual’ duties and ‘additional’ services provided by the partners and, on the other, the lack of an element of subordination between the managing director of the applicant and the applicant itself and between the partners and the applicant.

51      By those pleas, the applicant sought, in essence, to ask the Court to find, on the basis of Article 272 TFEU, that the EACEA had incorrectly declared to be ineligible, as staff costs, the remuneration paid by the applicant to the partners therein for the services they provided as part of the implementation of the European projects in question.

52      In response to the plea of inadmissibility raised by the EACEA in Case T‑306/15 and to a written question of the Court in Case T‑484/15, the applicant confirmed that interpretation of the pleas it was submitting in the present cases and asked the Court to reclassify the present actions for annulment as contractual claims brought on the basis of Article 272 TFEU, thereby expressing its express intention to that effect.

53      Since the two cumulative conditions are met in the present case, it is necessary to reclassify the present action as an action brought on the basis of Article 272 TFEU, seeking a declaration by the Court that, by declaring ineligible some of the staff costs incurred by the applicant, the EACEA did not correctly interpret and apply the provisions of Article II.14 of the grant agreements relating to the NEST and ‘This it IT’ projects and point 2.3.1 of the Lifelong Learning Project Handbook, and incorrectly held the costs at issue to be ineligible.

54      It follows from the foregoing that, on the one hand, the present actions brought on the basis of Article 263 TFEU must be reclassified as actions brought on the basis of Article 272 TFEU and that, on the other, the Court has jurisdiction to rule on those actions pursuant to Article 272 TFEU and the arbitration clause contained at Article I.9 of the grant agreements relating to the NEST and ‘This is IT’ projects.

 The merits of the actions

55      In support of each of the actions, the applicant submits, in essence, that the EACEA made a manifest error of assessment in concluding, first, that there were no criteria making it possible to distinguish between ‘usual’ duties and ‘additional’ services provided by the partners and, secondly, that there was no element of subordination between, on the one hand, the applicant’s managing director and the applicant itself and, on the other, between the partners and the applicant.

56      However, it should be noted that, as stated in paragraph 51 above, by raising the ‘pleas alleging manifest error of assessment of the EACEA’, the applicant must be regarded, in the present case, as asking the Court to find that the EACEA incorrectly classified as ineligible the staff costs corresponding to the remuneration paid to the applicant’s shareholder/partners for the services provided as part of the implementation of the European projects in question.

57      From the outset, it is apparent from the case-law that, according to a fundamental principle governing European Union financial aid, the European Union can subsidise only expenses which have actually been incurred. Accordingly, in order for the institution or the body concerned to be able to carry out a review, the beneficiaries of such aid must show that the costs attributed to subsidised projects are genuine, the provision by those beneficiaries of reliable information being indispensable to the successful operation of the overview and evidentiary system instituted in order to check whether the conditions for the grant of aid are satisfied. It is not sufficient, therefore, to show that a project has been carried out for the allocation of a specific subsidy to be justified. The beneficiary of the aid must, in addition, produce evidence that he has incurred the expenses declared in accordance with the conditions laid down for the grant of the aid concerned, with only those expenses which are properly justified being capable of being regarded as eligible. Its obligation to satisfy the prescribed financial conditions even constitutes one of its key commitments and accordingly determines the allocation of EU financial aid (see judgment of 5 October 2016, European Children’s Fashion Association and Instituto de Economía Pública v EACEA, T‑724/14, not published, EU:T:2016:600, paragraph 94 and the case-law cited).

58      Therefore, the fact that the projects which were the subject of the grant agreements were indeed carried out is not sufficient, in itself, to prove that the costs declared were actually incurred. It is in this logic that Article II.14.1 of the general terms and conditions requires that, in order to be considered as eligible, costs are identifiable and verifiable and the accounting and auditing procedures adopted by the beneficiary ensure a direct correspondence between, on the one hand, the costs and revenue declared and, on the other hand, the supporting documents related to them.

59      It is in the light of those considerations that the merits of the arguments relied on must be examined.

 The first plea, alleging a manifest error of assessment in distinguishing between ‘usual’ duties and ‘additional’ services provided by the partners

60      The applicant submits that the EACEA incorrectly took the view that it had not fulfilled the conditions laid down by the grant agreements and that the distinction between ‘usual’ duties and ‘additional’ services provided by the partners was not based on clear and objective criteria.

61      In its view, it is commonly accepted that the distinction between ‘usual’ duties and ‘additional’ services provided by the partners is based on the nature of the services in question. It stresses that ‘usual’ duties are, by nature, only those that are provided by the partners in their capacity as partners and are related to the administration and essential functions of the company, such as the management of funds, the conclusion of contracts with third parties and the representation of the company.

62      The applicant claims that, according to the case-law of the Courts of the European Union and of the Arios Pagos (Supreme Court of Cassation, Greece), the conclusion of a contract between a company and one of its shareholders, by which the latter offers his work, for a limited period of time, in the context of a specific project, for remuneration, is possible and that, in that case, the ‘additional’ services provided by the shareholder are those that go beyond the ‘usual ‘duties provided.

63      The EACEA disputes the merits of the applicant’s arguments. It submits that, in the absence of clear and objective criteria to distinguish between ‘usual’ duties and ‘additional’ services, it rightly held that where they worked on the European projects at issue, the partners and the managing director did not provide ‘additional’ services but fulfilled their ‘usual’ duties as partners.

64      In the present case and as is apparent from the parties’ written pleadings, it is not disputed that the partners provided services as part of the implementation of European projects entrusted to the applicant, in return for remuneration.

65      However, neither the arguments raised by the applicant nor the documents produced by it are such as to establish that the services supplied under the implementation of the European projects at issue constitute ‘additional services’, in that they went beyond the services that the partners were required to provide in their capacity as partners.

66      The applicant’s arguments based on the resolution of its general assembly of 20 December 2010, providing for the possibility for the partners, including the managing partner, to provide ‘additional’ services going beyond ‘usual’ duties, the relevant partners thus becoming employees of the applicant and subordinated to it, cannot be upheld.

67      The question whether the applicant had the capacity to conclude contracts of employment with its partners, going beyond the services provided by them in their capacity as partners, must be assessed in the light of the law applicable to the applicant.

68      In that regard, it should be recalled that, according to the case-law, the connecting factor designating the law applicable to a company is to be determined either in accordance with the theory of the place of incorporation (see, to that effect, judgment of 17 March 2005, Commission v AMI Semiconductor Belgium and Others, C‑294/02, EU:C:2005:172, paragraph 60), or in accordance with the theory of the principal place of business (see, to that effect, judgment of 11 October 2001, Commission v Oder-Plan Architektur and Others, C‑77/99, EU:C:2001:53, paragraph 28). In the present case, given that the applicant was formed under Greek law and has its principal place of business in Greece, Greek law is, in any event, applicable.

69      Greek law provides that the partnership agreement, within the meaning of Article 741 of the Greek Civil Code, does not preclude the conclusion, in parallel, of an employment contract, within the meaning of Article 648 of that Code, between one of the shareholders in the company and the company itself, provided that the former provides to the latter a service that is not included in his contribution and is, therefore, distinct from that which he is required to provide as a partner, in return for remuneration and under the subordination of the company that employs him (see, to that effect, judgment of the Arios Pagos (Supreme Court of Cassation) No 156/1998).

70      If the service to be provided as part of the contract of employment is of the same nature as that which the partner is required to provide in his capacity as partner, it is necessary, first of all, to make a quantitative distinction between the service provided as an employee and that provided as a partner, so that the fulfilment, on the one hand, of statutory obligations and, on the other, of the contractual obligations, may subsequently be reviewed (Lixouriotis, I., Ατομικές Εργασιακές Σχέσεις, Nomiki Vivliothiki, 2013, Athens, p. 103; see also the judgment of the Arios Pagos (Supreme Court of Cassation) No 44/1997).

71      Contrary to what the applicant claims, it is impossible to infer from the resolution of the general assembly of 20 December 2010 - which merely indicates that ‘additional’ services are exclusively determined by the managing director and that they are ‘beyond the normal services offered by them in their capacity as partners’ - the clear and objective criteria which would make it possible to distinguish, in the case of partners and the managing director, between ‘usual’ duties and ‘additional’ services. Therefore, no precise definition of ‘additional’ services is given in the resolution of the general assembly of 20 December 2010.

72      In that regard, it should be noted that, in general, services provided to the company by the partners are defined only in the applicant’s Articles of Association. Article 8 of the Articles of Association provides that the partners contribute by all means to the development of the company and the achievement of its objectives in the best way, especially with their own work. It follows from those provisions that it is by their work as partners that they participate in the applicant’s development and the achievement of its objectives. Among those objectives, as set out in Article 3 of the Articles of Association, is the preparation, implementation, management, administration and evaluation of European projects. Therefore, contrary to what the Applicant claims, the Commission correctly took the view that the distinction between ‘usual’ duties and ‘additional’ services provided by the partners to the company was artificial.

73      For those reasons, the applicant’s argument that the distinction between ‘usual’ duties and ‘additional’ services is based on the commonly accepted different nature of those services cannot be accepted.

74      Contrary to what is provided for by Greek law in such a situation (see paragraph 71 above), no quantitative distinction, making it possible to distinguish, among the services provided by the partners, between those provided in their capacity as partners and those provided in their capacity as employees, was previously made by the applicant.

75      For the purpose of establishing the contribution made by the partners by way of ‘additional’ services, the applicant provided a copy of a decision, signed by the managing director, Mr K., recruiting the managing director and a partner, Ms S., as members of the team working on project NEST at an hourly rate of EUR 50 for the period from November 2011 to September 2013. It also produced a part-time employment contract, dated 1 November 2011, recruiting a partner, Ms S., until 31 October 2014 on project NEST. With respect to project ‘This is IT’, the applicant produced a decision, dated 2 January 2012, signed by the manager, Mr K., recruiting a partner, Ms S., as a member of the team working on project ‘This is IT’ at the daily rate of EUR 280, a decision of the managing director, of 30 September 2013, allocating to a partner, Ms S., a remuneration of EUR 7 280 for her contribution to project ‘This is IT’ for the period from 1 June 2012 to 31 May 2013 and an amount of EUR 1 540 for her contribution to project ‘This is IT’ for the period from 1 June 2013 to 30 September 2013. The applicant also produced a part-time employment contract, dated 2 January 2012, recruiting a partner, Ms S., until 31 December 2013 on project ‘This is IT’.

76      Moreover, the applicant submitted to the EACEA pay slips and details of the remuneration paid to the partners, as well as the decisions of the managing director hiring a partner and himself as members of the project NEST team and a partner as a member of the project ‘This is IT’ team, as well as the related time sheets.

77      In addition, the applicant has placed on the file of the present case three tax declarations for the years 2011, 2012 and 2013, from which it is not possible to identify either the salaries which were paid to the partners in consideration for the implementation of the projects in question or the related social security charges.

78      It must be observed that those documents are insufficient to establish that the remuneration paid to the partners for the services provided in the implementation of the European projects in question meet the criteria of eligibility of staff costs, as laid down in the Greek legislation and the provisions of the grant agreements in question.

79      In that regard, it should be recalled that, according to the terms of Article II.14 of the grant agreements relating to the NEST and ‘This is IT’ projects, the eligible costs are those costs which are necessary for the implementation of the action, which are identifiable and verifiable, which are inter alia recorded in the accounting records of the beneficiary and which comply with the requirements of applicable tax and social legislation. Moreover, according to point 2.3.1 of the Lifelong Learning Project Handbook, costs relating to, on the one hand, statutory staff, having either a permanent or a temporary employment contract with a partner and, on the other, temporary staff, recruited through a specialised external agency, are considered.

80      Point 2.3.1 of the Lifelong Learning Project Handbook also lists the supporting documents needed to establish the eligibility of staff costs. Thus, the document explaining the internal policy on salaries and the calculation of the daily cost rate as well as the time sheets signed by both the worker and the person responsible in the organisation, and mentioning the name, function and tasks fulfilled, reference to the work programme’s activities, and the number of hours per day or days per month allocated to the project must in particular be provided. The official payroll document which makes it possible to check both the number of days worked and the amounts paid and proof that the salaries and social security contributions recorded in the accounts have been paid by the partner to the authorities must also be provided.

81      In the present case, the EACEA submits in its written pleadings, without being seriously challenged, that the applicant was unable to produce an employment contract showing that the services provided by the partners as part of the implementation of the projects at issue went beyond the services that they were obliged to provide under their statutory obligations as partners.

82      In those circumstances, it must be held that the applicant failed to establish that the services provided by the partners in the implementation of projects NEST and ‘This is IT’ were ‘additional’ services provided as employees that met the criteria of eligibility for staff costs as set out in the Greek legislation and the provisions of the grant agreements in question.

83      Accordingly, the first plea in law must be rejected as unfounded.

 The second plea in law alleging a manifest error of assessment as regards the lack of an element of subordination

84      The applicant submits that the EACEA incorrectly held that there was no genuine element of subordination, which is a feature of an employment relationship, on the one hand, between the managing director of the applicant and the applicant itself and, on the other, between the applicant and the non-managing partners, with regard to the services provided in the context of the implementation of the European projects in question.

85      The EACEA challenges the applicant’s arguments.

86      It is apparent from the combined provisions of Articles 648 et seq. of the Greek Civil Code and Article 6 of Law No 765/1943 (FEK A’ 341) that a contract of employment exists, under Greek law, where the employee undertakes to work for a specified or indefinite period under the direction of the employer in return for remuneration, irrespective of how this remuneration is determined and paid (judgment of the Efetio Thessalonikis (Court of Appeal of Thessaloniki, Greece) No 390/2003).

87      It follows that the features of an employment contract, in Greek law, are the provision of a service, the payment of remuneration for that service and the existence of an element of subordination between employer and employee.

88      With regard to the element of subordination, although the Greek Civil Code gives no definition of the term, the case-law has defined the characteristics thereof. Thus, the element of subordination is characterised by the employer’s power to supervise and monitor the work carried out by the employee and to give him orders and directives concerning the place of the activity, the time and working arrangements.

89      According to case-law, a contract of employment exists under Greek law where the employee works for a salary and is legally dependent on the employer in that the latter has the right, on the one hand, to determine the place, the date and the working arrangements of the work to be provided, in accordance with the applicable legislation and the terms of the contract, in a binding manner in respect of the employee, giving him the instructions necessary for that purpose, which must be followed and implemented, and, on the other, to monitor compliance with them by the employee and the general performance of the work allocated (judgments of the Efetio Thessalonikis (Court of Appeal, Thessaloniki) No 390/2003 and of the Arios Pagos (Supreme Court of Cassation) No 156/1998).

90      It is immaterial that in practice the employer exercises his right or leaves it to the initiative of the employee, as long as that freedom does not lead to the duty of obedience to the employer being set aside and does not lead to additional freedom of action in the performance of duties which is outside of the employer’s control (judgment of the Efetio Thessalonikis (Court of Appeal of Thessaloniki) No 2367/2001).

91      Therefore, in the absence of an element of subordination, that is in the absence of any control by the employer over the place, time and working arrangements, no employment contract exists under Greek law.

92      In that regard, it must be stated that neither the arguments raised by the applicant nor the documents produced by it make it possible to establish, in the present case, the existence of an employment relationship or an element of subordination with regard to the services provided by the partners in the implementation of the European projects in question.

93      The applicant submits that the working relationship between the partners and itself flows from the resolution of the general assembly of 20 December 2010.

94      According to that resolution, it is for the managing director to decide if a project requires ‘additional’ services to be provided, to determine the nature and extent of those services and to determine the remuneration paid for those services. According to that resolution, the managing director is to designate himself to work on the projects in question and to set his own remuneration.

95      In that regard, it should be noted, on the one hand, that, although he claimed to be under the supervision of the manager of the European projects during the period in which he took part in implementing the projects in question, the managing director continued to carry out his usual duties as managing director in respect of all other activities of the applicant and, on the other, that the managing director may not, according to Greek case-law, sign his own contract of employment.

96      Moreover, as rightly pointed out by the EACEA, it is unlikely that the manager of the European projects in question could, if necessary, have put an end to the managing director’s participation in implementing the projects at issue in the event that his services were considered inadequate, even though he continued, in his capacity as managing director, to carry out all his other duties on behalf of the applicant.

97      Furthermore, with regard to the situation of the partners, the existence of an element of subordination is not established either. It follows from the provisions of Articles 8 and 14 of the applicant’s Articles of Association that all partners contribute with their own work to the development of the applicant and that any decision concerning the applicant is to be taken by common agreement by the partners.

98      Furthermore, as for the managing director, it is unlikely that the manager of the European projects could, if necessary, have put an end to the partner’s participation in the implementation of the European projects in question in the event that the latter’s services were deemed inadequate.

99      Finally, it should be noted that, if a partner wanted to work on the implementation of the European projects, this could only be done on a voluntary basis and with the agreement of the other partners and in accordance with the rules determined collectively.

100    As regards the documents produced by the applicant in order to establish that the services provided by the partners in implementing the European projects were provided as part of a contract of employment or an employment relationship, it should be noted that the applicant has not submitted any documents other than those referred to in paragraphs 76 and 77 above.

101    It must be held that those documents are insufficient to establish the existence of an employment contract or an employment relationship between, on the one hand, the applicant’s managing director and the applicant itself and, on the other, the partners and the applicant.

102    In those circumstances, it must be held that the applicant failed to establish that the services provided by the partners in the implementation of projects NEST and ‘This is IT’ were provided as part of an employment contract or an employment relationship that met the criteria of eligibility for staff costs, as set out in the Greek legislation and the provisions of the grant agreements in question referred to in paragraphs 80 and 81 above.

103    The second plea in law must therefore be dismissed as unfounded.

104    Since none of the pleas in law relied upon by the applicant are well founded, the present actions must be dismissed in their entirety.

 Costs

105    Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

106    Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the EACEA.

On those grounds,

THE GENERAL COURT (First Chamber),

hereby:

1.      Joins Cases T‑306/15 and T‑484/15 for the purposes of the decision closing the proceedings;

2.      Dismisses the actions;

3.      Orders KV to pay the costs.

Delivered in open court in Luxembourg on 20 June 2018.

*      Language of the case: English.

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